Tel Aviv — Two American and Israeli investment banks recently lowered their estimates on Israel Chemicals Ltd. (ICL). Citi Capital Markets predicted that earnings at the Israeli fertilizer and specialty chemical maker would total $1.12 per share, 8 percent lower than the investment bank’s previous forecast. Earnings for 2013 were estimated at $1.12, or 4 percent lower than an earlier prediction. Citi based its new estimates on an expected drop in potash prices to $475/mt, and also cited India’s decision to halt fertilizer imports in the first quarter of 2012 to control subsidy prices. The report also noted that volumes in Europe had been affected during the first quarter. Israel’s Clal Finance expects an agreement with China in the near future will be a key indication of what can be expected in the potash market. The investment bank report believes that a price of $470/mt would be an achievement, with anything below $450/mt a negative indication for the direction of the potash market. The situation in India is also a concern for ICL, and uncertainty there is likely to have a negative impact. After several years of rapid revenue growth, Clal is predicting a 4.4 percent decline in revenues for ICL in 2012, though the investment bank expects growth to resume in 2013. The projected drop in revenues is a result of lower potash and fertilizer prices due to increased supply.
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